LONDON, May 29 (Reuters) - OPEC output in May has hit its
highest since 2008 as Saudi Arabia maintained high production
rates despite a drop in prices and Iranian shipments did not
fall substantially further ahead of an EU embargo, a Reuters
survey found on Tuesday.

Supply from the 12-member Organization of the Petroleum
Exporting Countries has averaged 31.80 million barrels per day
(bpd), up from 31.75 million bpd in April, the survey of sources
at oil companies, OPEC officials and analysts found.

OPEC's total is the highest since September 2008, shortly
before it agreed to a series of supply curbs to combat recession
and collapsing demand, based on Reuters surveys.

Oil prices surged in March to $128 a barrel, the
highest since 2008, because of concern about disruption to
global supply from U.S. and European sanctions aimed at hurting
Iran's crude export revenues.

Prices have since fallen back and Brent crude was trading
just below $107 on Monday.

Top world exporter Saudi Arabia has pumped an extra 100,000
bpd this month, the survey found, taking output to 10.10 million
bpd, the highest in decades.

Riyadh has made clear it would like oil prices to come down
and says it would like to see Brent at around $100 a barrel.

Extra supply is also coming from Nigeria in May, where
supply is rising due to rising production at a new Total
field, Usan. Even so, a production cut by Royal Dutch
Shell due to oil theft limited the increase.

Iranian oil exports have not dropped further in May after
falling sharply since March because core customers in Europe and
Asia continue to buy ahead of European sanctions aimed at
slowing Tehran's nuclear programme.

Iran's supply declined by 20,000 bpd to 3.13 million bpd in
May, according to the survey. That would be the lowest output in
Iran since it produced 3.088 million bpd in 1990, according to
figures from the U.S. Energy Information Administration.

The country is thought to be increasing the amount of oil it
is storing on tankers in the Gulf as its exports have dropped.